Bufka: Economic benefit of people important, not capitalism

Published 8:00 pm, Friday, April 17, 2009

The responses to my earlier columns about the economy prompt me to write again about this timely topic.

Capitalism

Capitalism is a system of private ownership of property that allows owners to use their property to obtain an income for themselves by providing merchandise or services. I have a problem with people who claim it is God's gift to us and must be protected and venerated at the altar of business. The word capitalism belies a fundamental bias in the system. Capitalism is based on wealth. It assumes that the owners of capital (wealth) have all the rights. No wealthy person would succeed, however, without a healthy number of employees who deserve respect. Adam Smith presumed morality would guide capitalism. Even back in the late 18th century he chastised owners who took excessive profits.

For any system to work properly, the people in it must have a moral compass to guide them. That compass must point to something more than the bottom line of profit for the owners and/or executives. Therein lies the first reason for our economic circumstances today. Too many people have used the system to their own advantage to the harmful effect of others. While I cannot judge you, the reader, I say that all of us are responsible to some degree for our current economic downturn.

At the top of the list of those responsible are the executives who think they deserve excessive salaries and bonuses even if their company is floundering near bankruptcy. Witness the recent bonus payments to executives at AIG after receiving $170 billion from the federal government - that means you and me! Witness, too, the hundreds of million dollars paid to the CEO of Merrill Lynch just before it went bankrupt. One of my readers defended these payments.

At the other end of the list, however, are people like you and me who expect our savings and retirement funds to continue to grow at a fast pace.

Socialism

A reader told me that, according to the Merriam-Webster dictionary, socialism is "any of various social systems based on shared or government ownership and administration of the means of production and distribution of goods." Given this definition, we already have a socialist economy. Ever since the beginning of our country the government has been doling out financial benefits to business. There have been and are tariffs, for example, to protect American business from foreign competition. We have been supporting farming for many years with subsidies. Airlines have benefited from the government dole. The entire oil industry still reaps enormous tax benefits while taking in billions of dollars of profit. The railroads of the 19th century were given millions of acres of land along the track right of way which they sold for much profit. They were even paid $1 million per mile of track laid. While capitalism fails the common good by allowing wealth to accumulate among the top 5 percent, socialism fails in not compensating hard work enough.

Many Republicans and others on the right, like Rush Limbaugh and Mike Huckabee, say that President Obama is a socialist. I wrote in January that progressive policies and programs are not socialism. Capitalism is not a god to be adored but a system to be used for the common good. Billy Wharton, editor of the Socialist magazine, analyzed Obama's policies from a Socialist Party position in an article in the Washington Post on March 12, 2009. Wharton emphatically states that Obama is no socialist. He added that all the talk by Huckabee, Limbaugh and others about socialism is bringing new members to the Socialist Party in numbers he hasn't seen in decades. The article is a good read at http://www.washingtonpost.com/wp-dyn/content/article/2009/03/13/AR2009031301899.html.

On the other hand, I, too, am concerned about the "generational deficit" that Sen. John McCain and our own Rep. Dave Camp accused the president of generating with his stimulus plan and spending budget for 2010. But I find it hypocritical of Republicans to be talking of the danger of deficits when the Republicans are responsible for the growth of the national debt from 1 trillion in 1980 to over 10 trillion in 2008, except for 1 trillion under Democrat Bill Clinton.

There is enough blame and confusion for everyone. Let's not make matters worse by hurling the label of "socialist" at Obama. It is time to stop it all and get this country back on track. That will take innovative thinking and planning on many levels, which President Obama is doing.

Norbert Bufka is a Midland resident and monthly contributor to the Midland Daily News. He can be reached by e-mail at norbert609@sbcglobal.net. You can visit his website at www.thisonly.org.